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How to implement economics

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I''m trying to get a bit into programming a wallstreet trader like game, based on a somewhat reallife economic system. I mean you have one product, which fluctuates in price eg. price can be higher/lower/stable. or the price can skyrocket to extreme heights. I have been trying to find books or sites, where I can learn more from this subject, but I''m not able to find one which can help me on the way. Does anyone of you know a site or whatever, where I can read more about this?

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check your local library. There should be plenty about this. And many games like this have been created, although proprietary. I played one a few years ago in a nationwide contest. Many academic institutions implement games of this kind.

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I have been looking for books about the subject, but I can''t seem to find one. Do you know any good titles about the maths of creating a good economical like system, like I discribed above?

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I suggest taking Macro-economics or Micro-economics, or get a book on the subject matter. Depending on how complex you want to make it, you will need a lot of facts. You can either randomly flucuate the prices or simulate traders..


Why Not?

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I see what you mean, It doesn''t have to be a complete simulation, but it has to be a somewhat low level sim which at first does the basics of an economical system.
I''m not sure whether you are familiar with the game dopewars? at first I want to built a economical like system like this, eg. prices up, prices down, prices stable, prices skyrocket or drop to almost nothing. Just a micro economic system which only has a few factors.

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Koopman,
The responses to your question, for the most part, have been correct. But to do a simulation that is a game - it isn''t necessary for you to have a Ph.D. Economics.

Do a search at Google for Economics or Macro+Economics or Micro+Economics and you should find enough material to give you headache after reading.

I do have a caveat to my above statement. The stock market is a secondary market and thus is extremely difficult to predict. Many have tried and none have succeeded. There really isn''t any book that will explain how you would simulate this entity precisely.

Follow up advise/brief thoughts:
If I were going to simulate the stock market in a wall street trader game I would first create a a made up company or a couple that produce some sort of product (stay away from service type companies to start, were trying to get the model down here). When a company is placed in the market they set aside a certain number of public available stocks and they sell these stocks at a set price. To keep the example simple, let''s say you create a company that manufactures watches. They set aside 10,000 stocks for the initial public offering (IPO) and the value of each stock is $1.00 - this could be calculated based on the current estimated value of the company/number of stocks. So, in my example the company is worth $10,000.

When the IPO takes place, the traders purchase the stocks sometimes for more and *GASP* maybe less. Let''s say that out of the 10,000 shares that were offered they were sold like this:

1000 shares sold for the asking price of $1.00
5000 shares sold for $1.15
and the final 4000 sold for $1.25

The total secondary market value of the company is $11,750 - not bad huh? I can''t remember how this works IRL but, I think the company is given a % of this - you could just give them the entire amount and it would not hurt the simulation. Any way you now have a opening value of $1.00 and a closing value of $1.25 ^.25 for the day.

Next you need a simulated group of consumers - which control the demand. The company determines the supply initially and after the initial demand is received. All of this would have to be AI driven (because it happens in the background).

The player in the game, I assume to be the trader would have been making the purchases of the IPO (if he wanted) and other stocks that you have simulated.

In the background the company is churning out products, consumers are making purchases or inventory could be piling up - whatever you want to simulate. In addition the company would post quarterly earning reports and analyst would be posting their take on each company that is available (a big job in and of itself - all AI).

Hmmm, this was all off the top of my head... so, don''t bash me - but I think that I''ve show you that even a high level simulation of the stock market would be difficult... especially when it is all AI driven.

Good luck to you, I would like to see what you come up with!





Dave "Dak Lozar" Loeser

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